Equities have steadied this morning after yesterday’s sell off following surprisingly poor US GDP figures, something which The Trader Dominic Picarda is not discounting but thinks could actually become a positive for shares.
IC TIP UPDATES:
Standard Chartered (STAN) has issued a trading update detailing a period of disappointing trading in a ‘challenging environment’. Most parts of the business are in line with expectations except financial markets and group income is expected to be down by mid-single digit percentage on last year for the first six months of 2014 with loan impairment up by a ‘high teens percentage’. Overall, group operating profit is likely to be down by 20 per cent on last year. Our recommendation is under review.
Ophir Energy (OPHR) announces that its Okala-1 exploration well offshore Gabon failed to find hydrocarbons, marking the end of its campaign in the country as the drill rig will now move to Equatorial Guinea for three exploration wells there. We retain our buy rating on Ophir.
Packaging specialist DS Smith (SMDS) enjoyed a strong performance in the year to April, boosted by the acquisition of SCA Packaging. Revenues rose by 10 per cent to £4bn and pre-tax profits more than doubled to £167m. Buy.
Simon Thompson recommendation WH Ireland (WHI) has announced plans to expand its private wealth management business with the opening of a new office in Milton Keynes.
Construction engineering specialist Costain (COST) says trading is in line with expectations and its forward order book has expanded to a record level of £3.2bn. More than £950m of revenues have been secured for 2014 already. We keep our buy rating.
Galliford Try (GFRD) has won four new construction contracts in North Lanarkshire, Dorchester, Cambridge and London worth an aggregate £82m. Buy.
Simon Thompson recommendation 600 Group (SIXH) gained market share in the year to 29 March in what it describes as ‘challenging’ conditions in Europe and the US for its machine tools and laser marking products. In the first full year after a reorganisation of the business in 2012 revenues were flat at £41.7m but profits from continuing activities rose from £510,000 to £1.97m before exceptional expenses. Order intake also rose by 13.7 per cent to £42.5m.
Safestore (SAFE) posted a 1.7 per cent uplift in like for like revenues for the six months to April after improved performance in both its UK and French operations. Underlying like for like earnings rose by 5.5 per cent at constant exchange rates. The company has also been busy addressing its capital position through a fundraising and the sale of some properties during the period. We keep our buy rating.
Mobile payments specialist Monitise (MONI) has announced the acquisition of Markco Media, the owner of the Myvouchercodes.co.uk and Last Second Tickets brands. The deal is worth up to £28m, with the initial £24.5m paid out in Monitise shares. Buy.
Sell recommendation Bwin.Party Digital (BPTY) has been forced to deny press speculation that the company is considering breaking up its assets.
KEY STORIES:
Barclays (BARC) has received notification of a complaint filed by the New York State Attorney General relating to the investigation if its LX Liquidity Cross operation. The complaint contains allegations of fraud and deceptive practices.
London Stock Exchange (LSE) has announced the details of its intended $2.7bn acquisition of US-based index and investment management business Frank Russell to create a ‘global leader in index services’ as well as a significant player in the US ETF market. Of the consideration, $1.6bn will be funded by a rights issue.
Carphone Warehouse (CPW) and Dixons Retail (DXNS) have both issued results today ahead of their proposed merger. Carphone posted like for like revenue growth of 5.3 per cent and headline profit after tax grew from £55m to £102m. Dixons enjoyed a 76 per cent rise in underlying pre-tax profit to £166.2m with underlying sales up 3 per cent and online sales 16 per cent higher at £1bn.
Holidays and logistics business Dart Group (DTG) posted a 30 per cent rise in operating profit for the year to March, allowing a 47 per cent uplift in the full year dividend to 2.74p. But current trading has been weaker than expected, prompting management to warn that full year profits will be undershoot market expectations.
OTHER COMPANY NEWS:
Stobart (STOB) reports that trading is in line with expectations with its energy and aviation businesses both performing ahead of last year.
Photo-Me International (PHTM) posted a 4.6 per cent reduction in turnover to £186.6m for the year to April but profits rose 23.8 per cent and a positive outlook prompted management to increase the dividend by 25 per cent.
